Citing a lack of funds, San Francisco has indefinitely stopped taking new applications for a popular anti-eviction program that buys small apartment buildings to protect tenants from displacement, the Mayor’s Office of Housing confirmed to the San Francisco Examiner.
There is an exception. The Mayor’s Office of Housing does have funding available for possible additional small site purchases in two areas of San Francisco, SOMA and downtown, through special development fees in place specific to those two areas. But it is unclear how many sites would be purchased with those funds.
Since 2014, the Small Sites Program administered by the Mayor’s Office of Housing, has provided more than $50 million in funding to purchase 26 sites comprising 184 units.
These are small apartment buildings often targeted by real estate speculators who may offer tenant buyouts or initiate evictions.
There are another 14 sites being acquired through the program in various stages of completion comprising 154 units, some of which have already been publicly announced, and will total $51 million in city funding.
But there is no funding for additional acquisitions as noted by Supervisor Hillary Ronen during the Board of Supervisors Oct. 16 meeting. “The small sites program doesn’t currently have any money in it,” Ronen said. “We can’t add any new small sites in the city in the program and there is no plan to refill that fund in the near future.”
The program is largely funded through development fees under the city’s inclusionary housing law and contributing to the dearth of funds is the high cost of construction that has slowed down development, according to the Mayor’s Office of Housing director Kate Hartley.
“Market-rate construction starts have slowed due to high construction costs, so our Small Sites funding has slowed as well,” Hartley said in a Saturday email to the Examiner.
The Small Sites Program has helped the nonprofit Mission Economic Development Agency “save 22 buildings, preventing displacement and protecting affordability for 177 vulnerable households, including some small businesses,” MEDA spokesperson Christopher Gil told the Examiner.
“It’s been great to have the Small Sites Program in place since 2014,” Gil said. “We are disappointed that there aren’t currently more funds available, but we look forward to continuing to work with the city as more resources become available.”
Four months ago, in July, MEDA announced its 22nd site acquistion through the Small Site program — the four-story building at 4830 Mission St. That’s one of the 14 sites The City says it is near finalizing.
“Realtors blatantly marketed this property to showcase the fact that this was a ‘rare opportunity to own a non-rent-controlled building,’ making residents susceptible to rent increases once ownership changed hands,” MEDA said at the time, calling the Small Sites Program “a targeted approach to keep tenants, vulnerable to no-fault eviction by speculators, in their homes.”
Hartley said in a statement Wednesday that The City could breathe new life into the program with Tuesday’s passage of legislation introduced by Mayor London Breed and Supervisor Aaron Peskin. The legislation creates the Seismic Safety Retrofit and Affordable Housing Loan program to finance the rehabilitation of seismically “at-risk” residential buildings. The funding could also go toward the purchase of sites.
The legislation implemented the 2016 voter approved Proposition C, which repurposes $260 million in unused bond money voters authorized back to 1992.
“The Small Sites Program is a key part of the Mayor’s Office of Housing and Community Development’s strategy to prevent displacement and preserve existing affordable housing by removing it from the speculative market,” Hartley said in a statement to the Examiner. “We are looking forward to continuing this important work with our development partners, by leveraging up to $260M in low-cost and long-term financing.”
But Ronen on Wednesday told the Examiner she was unclear how useful those funds would be for the Small Sites Program, noting that there are restrictions.
The shortage of funding for the popular Small Sites Program was highlighted by some candidates in the last June mayoral race.
Breed, then Board of Supervisors president and mayoral candidate, supported Proposition D on the June ballot that would have imposed a gross receipts tax increase on commercial rents to fund housing development and small site purchases, but it did not pass. The measure was largely viewed as a political maneuver to combat a higher tax measure proposed by progressive board members to fund childcare services, which did pass.
Other ideas to fund small sites acquisitions include launching a municipal bank, a proposal under study by the Municipal Bank Feasibility Task Force through the Tax Collector’s Office. The task force next meets Thursday.
“Too often we are hearing that there isn’t enough money for affordable housing, there isn’t enough money for the small sites acquisition program, small business are vulnerable and can’t afford seismic retrofitting, ” Jessie Fernandez, an organizer with PODER and a member of the Coalition for a Municipal Bank, told the board in a July meeting. “These are all the things a municipal bank could support us in doing.”